We're Going Back Into High-Yield Debt, Says Legal and General's Roe

The video discusses the performance of high yield debt, noting its recent correction and attractiveness compared to other credit classes. It highlights the impact of liquidity on investment strategies and the potential risks associated with leveraged loans. The discussion also covers expected default rates and market outlook for 2019, emphasizing the importance of understanding market dynamics and risk management.

What was one of the better performing credit asset classes in Q1?

• Investment grade debt

• Leveraged loans

• Emerging market debt

• High yield debt

Why is the lack of liquidity in high yield debt considered attractive?

• It increases default rates

• It reduces risk

• It offers better entry points

• It allows for quick exits

What is a concern when trying to exit high yield debt positions?

• High default rates

• High transaction costs

• Long duration

• Lack of liquidity

Why are leveraged loans not an obvious buy according to the speaker?

• They have low returns

• They carry risks that are hard to price

• They are easy to price

• They have high liquidity

What default rate is expected in the high yield space for 2019?

• 2-3%

• 0.5%

• 1-2%

• 4-5%